Ex-spouse Claims Ex-spouse's Life Insurance Policy

Law

December 3, 1989|By Robert Bruss, Tribune Media Services

The case history: In 1983, Minnesota Mutual Life Insurance Co. (MML) issued Deborah and Robert a joint mortgage life insurance policy obligating MML to pay the policy limit if either should die. In 1984, they were divorced. Robert deeded his interest in the family home to Deborah where she lived with their children. She continued to pay the policy premiums.

In 1986, Deborah sold the house and bought another. She wanted to continue the policy coverage on her new home and MML sent her a change of beneficiary form that she completed and returned.

Shortly thereafter, Robert died in 1987. A dispute developed between Robert's estate and Deborah, both claiming the $180,000 insurance policy proceeds. Unable to decide who should get the money, MML interpleaded the $180,000 and asked the court to decide.

The legal question: If you were the judge would you rule that Deborah should receive the mortgage insurance policy proceeds?

The decision: The judge said yes.

When Robert and Deborah divorced, Robert expressly shifted ownership of the family home to Deborah, the court began. This action thereby made Deborah the sole owner of the policy and her single designation of beneficiary became effective, he continued.

Deborah had the burden of proving Robert's intent to shift the home ownership and policy benefits to her and she has been successful, the judge ruled.

Because she paid the policy premiums and owned the home, there was an equitable assignment of the policy so the proceeds shall go to Deborah, the judge concluded.

Based on the 1989 U.S. District Court decision in Minnesota Mutual Life Insurance Co. vs. Leach, 716 Fed.Supp. 34.